Proposed Constitution of 1862. In the proposed constitution of 1862, the article on Revenue was continued, containing all the provisions in Article IX of the Constitution of 1848, and three new sections as follows:

Section 6 provided that all taxes should be collected by the same person. Section 8 required the General Assembly to provide that all taxes and assessments should be due and paid on a certain day. Section 9 provided that the General Assembly should levy a uniform tax on bank circulation.

In the article on the legislative department the financial provisions in the corresponding article in the constitution of 1848, were continued with some additions. Municipalities, as well as the state, were prohibited from loaning their credit or subscribing to the stock of corporations or associations; and the general assembly was prohibited from modifying the terms of the Illinois Central Railroad charter.2

Constitution of 1870. In the Constitutional Convention of 1869-70, provisions relating to taxation and finance were reported by four different committees,-legislative department, revenue, state and local indebtedness and municipal corporations. The main discussion took place in connection with sections relating to revenue from the Illinois Central Railroad and prohibiting municipal corporations from loaning their credit or subscribing to stock (both of which were submitted separately and adopted), and one authorizing special taxation for local improvements.

In the revised constitution there were a number of changes, some by omission of former provisions, and more by addition. In Article IV on the Legislative Department, provisions relating to appropriations and state debt were brought together in sections 16-21 and 33. Section 16 contained the provisions of section 22 of Article IV of the former constitution, with a new provision that: "The General Assembly shall make no appropriation of money out of the treasury in any private law."

Section 17 made some changes from Section 26 of Article III of the former constitution. An Auditor's warrant is required for drawing money from the Treasury; and a statement of money expended at the session of the General Assembly is required in place of the former "statement of the receipts and expenditure of the public money.' last clause in Section 26 relating to the ineligibility of defaulting officers was included in Section 4 of Article IV.

Section 18 made some changes from Section 37 of Article III of the former constitution. Appropriations by each General Assembly are to cover the necessary expenses "until the expiration of the first fiscal quarter after the adjournment of the next regular session." The amount of state debt permitted to meet casual deficits was increased to $250,000.3

2 Proposed Constitution of 1862. Art. IV, Secs. 35, 38.

A provision requiring appropriations to be made by a general law was agreed to in Committee of the Whole, but was not reported to the Convention. Proceedings and Debates, I.

Section 19 (new) prohibits retrospective appropriations for services or claims under any agreement not authorized by law, except for expenditures incurred in suppressing insurrection or repelling invasion.

Section 20 extended the prohibition on loaning the credit of the state (Section 38, Article III in Constitution of 1848) to assuming the debts of any corporation, association or individual.

Section 21 (corresponding to Section 24 of Article III in Constitution of 1848) provides that the compensation of members of the General Assembly shall be prescribed by law, but no change may be made during their term; and limits other allowances to $50 per session.

Section 33 of Article IV (new), limited appropriations for the new state house to a total of $3,500,000 without a vote of the people. Article IX on Revenue was increased from six to twelve sections. The changes made are noted in the following analysis:

Section 1 of the former article authorizing a poll tax was omitted. Section 1 in the Constitution of 1870 corresponds to Section 2 of the former constitution, reaffirming the rule of uniformity and adding to the list of objects and subjects of special taxation-"liquor dealers, insurance, telegraph and express interests or business, vendors of patents and corporations owning or using franchises or privileges", with a further qualification that all such special taxes shall be "by general law, uniform as to the class upon which it operates".

Section 2 in the new constitution is the same as Section 6 in the constitution of 1848.

Section 3 added to authorized exemptions, property used exclusively for agricultural and horticultural societies and for cemetery purposes, required exemptions to be made by general law, and provided that: "In the assessment of real estate encumbered by public easement, any depreciation occasioned by such easement may be deducted in the valuation of such property".

Sections 4 and 5 relating to tax sales and redemptions took the place of the more detailed provisions in section 4 of the former constitution.

Section 6 (new) prohibits the General Assembly from releasing local districts from state taxes, or any commutation for such taxes. Section 7 (new) provides that "all taxes levied for state purposes shall be paid into the state treasury".

Section 8 (new) establishes a limitation on county taxes of 75 cents per $100., except for debt existing at the adoption of this constitution, unless authorized by a vote of the people of the county.

Sections 9 and 10 take the place of section 5 in the former constitution. The General Assembly is specifically authorized to vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of contiguous property, or otherwise". The provision for corporate taxation under the uniform rule is extended to "all municipal corporations". The General Assembly is prohibited from imposing taxes on municipal corporations for corporate purposes; and private property is declared not liable for the debts of municipal corporations.

Section 11 (new) repeats with reference to municipal officers. provisions of other parts of the constitution as to the ineligibility of defaulting officers, and prohibits the increase and decrease of compensation during the term of officers elected or appointed for a definite

term.

Section 12 (new) establishes a limit to the debt of municipal corporations of five per cent of the assessed valuation of taxable property, and requires a tax to pay interest and the principal within twenty years, with exception for bonds voted by the people in pursuance of law prior to the adoption of this constitution.

In addition to the provisions in the main constitution, three other sections, separately submitted and all adopted, related to financial questions.

Section 1 provided that the contract liability of the Illinois Central Railroad Co. shall never be altered or remitted; and that the money derived from the company, after payment of the state debt, shall be applied to the ordinary expenses of the state.

Section 2 prohibited any municipal corporation from subscribing to stock or loaning its credit to railroad or private corporations, unless voted under authoirty of law before the adoption of the constitution.

Section 3 required a popular vote to authorize the sale or lease of the Illinois and Michigan Canal; and prohibited the loan of state credit or appropriations in aid of railroads or canals, except that surplus earnings of any canal or water power might be appropriated for its enlargement, maintenance or extension.

Amendments. By an amendment to Section 31 of Article IV, adopted in 1878, the corporate authorities of drainage districts may be vested with power to make special assessments on propertly benefited.

An amendment to Section 16 of Article V, adopted in 1884, extended the Governor's veto to items or sections of appropriation bills.

An amendment to Article IX, adopted in 1890, added section 13, authorizing the city of Chicago to issue $5,000,000. in bonds on account of the World's Columbian Exposition.

An amendment to separate section 3, adopted in, 1908 authorized the construction of a deep waterway from Lockport to Utica, and the issue of bonds not to exceed $20,000,000 for such construction.

Revenue Legislation since 1870. A new revenue law was enacted in 1872, which still forms the basis of the present system of assessment and collection of taxes. This act further elaborated the rules for listing and valuing property, increasing the number of items. of personal property required to be scheduled. It provided for the review and equalization of original local assessments by the county

board; and it reorganized the State Board of Equalization (established in 1867), and added to its authority that of assessing railroad property and the stock of Illinois corporations.

Numerous amendments to the act of 1872 and other laws relating to taxation, have been passed from time to time. The more important of these have been the following:

An Act of 1895 to tax gifts, legacies and inheritances, amended in 1909 and at other times.

An Act of 1898 making some important changes in the methods of assessing property, especially in Cook County. This act did away with town assessors and collectors in the city of Chicago, and provided a Cook County board of assessors and board of review; it increased the powers of all county treasurers as supervisors of assessments, and reorganized and increased the powers of county boards of review. It also recognized the practice of undervaluation in the assessment of property by providing that the taxable value should be one-fifth of the "full value".

An Act of 1901, (the Juul law) which has been frequently amended, established a general limitation on the aggregate tax rates, and for the reduction of rates over the limit.

An Act of 1909 provided for an increase in the taxable value of property from one-fifth to one-third of the full value. In 1919, a further increase to one-half was made. These changes were made to enlarge the borrowing power of municipalities under the constitutional debt limit; and in each case corresponding reductions were made in the authorized tax rates of local authorities.

An Act of 1917 abolished town collectors; and placed the coilection of taxes entirely in the hands of the county treasurers.

Acts of 1919 abolished the large elective State Board of Equalization, and provided for a State Tax Commission of three members, appointed by the Governor; and established an increased scale of license taxes on corporations and insurance companies.

III. JUDICIAL DECISIONS ON TAXATION

Early cases. Two decisions of the Supreme Court of Illinois, under the rule of uniform taxation as laid down in the first state constitution, indicated a liberal construction of the rule.

In Sawyer v. the City of Alton (1841) it was held that the con stitutional provision for uniformity did not prevent a poll or capitation tax or a law requiring labor service on roads.

"We are of opinion the framers of the constitution intended to direct a uniform mode of taxation on property, and not to prohibit any other species of taxation, but to leave the legislature the power to impose such other taxes as would be consonant to public justice, and as the circumstances of the county might require. They probably intended to prevent the imposition of an arbitrary tax on property, according to kind or quantity, and without reference to value. The inequality of that mode of taxation was the object to be avoided. We cannot believe they intended that all the public burdens should be borne by those having property in possession, wholly exempting the rest of the community who, by the same constitution were made secure in the exercise of the rights of suffrage, and all the immunities of the citizen."

In Rinehart v. Schuyler, et. al. (1845) it was held that the revenue laws from 1823 to 1829 were not unconstitutional because they provided for the classification of lands at specific valuations named in the law. It was maintained that the system of valuation and classification was the most equitable and convenient, and that a valuation of the lands by personal examination and inspection would not only have been inconvenient and expensive, but absolutely impracticable.2

But in later decisions the rule of uniformity has been more strictly enforced, and applied, not only as to all forms of tangible. property, but also to intangible wealth in the form of stocks and bonds, mortgages and other securities, and credits.

Intangible property. The taxation of credits and intangible rights as property has been upheld. In the case of Trustees etc. v. McConnell it was held that money loaned was a subject of taxation. In the case of People v. Rhodes, it was held that notes for money due for land sold by contract, was a proper subject of taxation, as well

1 Sawyer v. The City of Alton, 4 Ill. 127. 129 (1841).

2 Rinehart v. Schuyler et al., 7 Ill. 173, 505, 511 (1845).

3 12 Ill. 158 (1850)